(Nov 25): US stocks declined as Alphabet Inc threatened the dominance of Nvidia Corp and traders assessed delayed economic data for clues about the interest-rate path of the Federal Reserve.
The S&P 500 Index fell 0.2% at 10:07am in New York, threatening to snap a two-day win streak. The tech-heavy Nasdaq 100 Index declined 0.77%, falling as much as 1.3% early in the session. The Cboe Volatility Index hovered at around 21.
An equal-weighted version of the S&P 500, which makes little distinction between a behemoth like Amazon.com Inc and relative minnow like Axon Enterprise Inc, rose 0.4%.
Alphabet shares jumped 2.2% at the open, with the tech giant on track to hit US$4 trillion ($5.2 trillion) in market valuation for the first time, after a report that Meta Platforms Inc was in talks to spend billions on Google’s artificial-intelligence chips. In response, Nvidia shares dropped, pulling back from gains it made in Monday’s tech-fuelled rally.
The AI industry has come under scrutiny in recent weeks, with stretched valuations causing some volatility. Miller Tabak & Co’s Matt Maley said there’s “no guarantee” the bullish narrative around the technology will stay as strong as it was from April to October, and views the action in Nvidia as a potential problem.
Nvidia’s “poor action since they reported their earnings is definitely a concern for the bulls given that it is such a highly weighted stock in the major averages and the key tech ETFs,” Maley said.
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“If Nvidia keeps falling (it’s not oversold) and Alphabet takes some sort of breather soon, the tech sector could be in for another decline before the year is over,” he added.
Long-awaited data
Economic data from September was finally released, providing traders with delayed insight into the health of the consumer. Retail sales rose modestly in September, suggesting some consumers were holding back after several months of robust spending.
See also: Tech stocks lead as rate-cut bets keep rally alive
Wholesale inflation picked up in September on higher energy and food costs, offsetting more modest advances in consumer goods. The 0.3% increase matched the median projection in a Bloomberg survey of economists.
Clark Bellin, president and chief investment officer at Bellwether Wealth, said that the producer price index figures coming in-line with expectations and helps justify another rate cut from the Fed in December.
“While this data is old and from September, it’s the only inflation data the Fed has to base its current decisions off of,” Bellin said.
Meanwhile, Annex Wealth Management’s Brian Jacobsen noted that the inflation picture had “changed more than the consumer spending picture has.” In his view, the adjustment of prices to the new tariff reality is closer to the end than the beginning.
“Taking a pause on rate cuts would probably do more damage to sentiment than a cut would help, but Powell doesn’t need to be the Grinch that stole Christmas,” said Jacobsen.
In terms of notable stock moves, Kohl’s Corp surged 34% after raising its full-year outlook for the second-straight quarter. Abercrombie & Fitch Co soared 24% after raising the low end of its 2026 net sales and earnings per share guidance.
Shares of Amentum Holdings Inc rallied after the defense contractor posted fourth-quarter revenue growth. Oracle Corp dropped after being downgraded to hold from buy at CFRA on debt concerns.
Uploaded by Magessan Varatharaja
